Whenever there is a delay at your real estate project, the first thing that you do is to curse your developer for the same. This is a very common and obvious reaction. But do you really know the reason behind that delay!
So, we are here again with some myth-breaking information. And today we through some light on a general perception that every developer is a cheat or a defaulter.
Well, as per a research report by Assocham which came in the month of May last year, around 85% of the total projects which have crossed the launch phase, are delayed. And 95% of all the delayed projects are residential. Also, these projects are delayed by an average of 40 months.
So, the general perception says that the developers are delaying the projects because they are the cheats. No! it’s not the case always.
There are three basic reasons for the delays. Red-Tapism, changing norms and rules and then the fund crunch. Surprisingly, most of the projects are delayed due to the first two reasons and they have nothing to do with the developer.
When a project is conceptualised, the developer has to take several approvals from respective authorities. Some of the major approvals required to launch a project are NOC from Pollution Control Board, Environment Clearance, NOC from forest department, Ancient monument distance clearance, road access clearance, AAI height clearance, building layout approval, infrastructure layout approval, commencement cirtificate etc. Altogether, there are approx 40 approvals need to be taken to start a project. Though, there are time limits specified for each approvals which varies from a least of 15 days to a max of 6-8 months. However, these approvals take their own time and the reason is red tapism.
Moreover, with RERA into the picture now, no developer can advertise about a project without registering that under the Act. And to register the project, a developer has to take these approvals. And therefore the delay.
We are not saying that developers are not at all at fault. Those who could not manage their flow of funds, their projects are delayed. Thanks to the consumer courts and National Company Law Appellate Tribunal who are now taking project delays very seriously.
But the question is when the project gets delayed due to this red tapism, can the authorities be brought under the law?